Louis Proyect: The Unrepentant Marxist

July 30, 2013

Obama doublespeak on the economy

Filed under: economics,financial crisis,Obama,workers — louisproyect @ 7:05 pm

Last week Obama gave a speech at Knox College in Illinois on the economic situation that like his remarks on Trayvon Martin a few days earlier was filled with the number of bromides calculated to give his MSNBC posse just enough to rally around. To give you a sense of the shallowness of it all, he uses the term “folks” 26 times. One supposes that with people like Al Sharpton and Ed Schultz, the only thing that would cause a breach with the President is a Swiftian modest proposal that hungry folks eat their children.

Early on in the speech he says:

See, I had just spent a year traveling the state and listening to your stories — of proud Maytag workers losing their jobs when the plant moved down to Mexico. (Applause.) A lot of folks here remember that. Of teachers whose salaries weren’t keeping up with the rising cost of groceries. (Applause.) Of young people who had the drive and the energy, but not the money to afford a college education. (Applause.)

The hypocrisy in this paragraph reaches achieves Olympian proportions. In 2008, when Obama was first making these demagogic appeals about the fate of Maytag workers, the Chicago Tribune reported that the main union at the plant urged a vote for Hillary Clinton. Leaving aside the logic of that advice, the union was correct to point out that Lester Crown, one of Maytag’s directors, raised tens of thousands of dollars for Obama’s campaigns since 2003. Crown’s son James was Obama’s 2008 campaign’s financial director for that matter. After Lester Crown revealed that Obama never brought up the plant closing with him, Obama’s alibi was that he was unaware that the Crowns had anything to do with Maytag. Oh, sure. To give you an idea of the incestuous relationship between big capital and the Democratic Party, as if you needed any reminder, here’s what warisacrime.org had to say:

Lester Crown first met Obama when he was a 27-year-old intern at the Sidley Austin law firm in Chicago in the summer of 1989. One of Obama’s law professors at Harvard, Martha Minow, had recommended Obama to her father, Newton Minow, who was a partner at the firm. Minow took Obama under his wing and introduced him to his friend Lester Crown. Crown recalls that Minow called him and “said we have in our office a young man who I think is really going places and I’d like you to meet him.” Crown says he has been a supporter ever since.

For people who applauded Obama’s plaint over the Maytag runaway plant, my advice is that outfits like SeaWorld get rid of their trained seals and replace them with these clapping fools.

Obama claims that he is also troubled by the fact that there were “teachers whose salaries weren’t keeping up with the rising cost of groceries.” Really? If Obama really cared about teachers, he would take a stand against the union-busting initiatives of his ex-Chief of Staff Rahm Emanuel or the charter school agenda of his Secretary of Education Arne Duncan. Using the excuse that teacher productivity must be raised, administrations across the country are firing teachers left and right. In 2010 the school board of Central Falls fired all 93 teachers, a move that Obama described: “If a school continues to fail year after year after year and doesn’t show sign of improvements then there has got to be a sense of accountability. That happened in Rhode Island last week.” This led Zeph Capo, a teachers union official in Houston, to state:

I ripped the Obama sticker off of my truck. We worked hard for this man, we talked to our neighbors and our fellow teachers about why we should support him, and we’re having to dig the knife out of our back.

One imagines that Capo fell into line when the 2012 election season started. After all, Obama was better than Romney. Romney would have not only fired the teachers but tied them to the roof of his car on a vacation trip to Canada. We can’t have that, can we?

Continuing along in the education vein, Obama added that the number of “young people who had the drive and the energy, but not the money to afford a college education” distressed him. This statement above all brought to mind the character that Jon Lovitz played on Saturday Night Live, the Pathological Liar.

I didn’t always lie. No, when I was a kid, I told the truth. But then one day, I got caught stealing money out of my mother’s purse. I lied. I told her it was homework – that my teacher told me to do it. And she got fired! Yeah, that’s what happened!

Just days after Obama’s speech, Congress passed a bill that tied student loan interest rates to financial markets. This proposal was not the typical Republican plan “forced” on Obama but was his own profit-making scheme inspired by a paper written by Jason Delisle at the New American Foundation, whose president Anne-Marie Slaughter (appropriately named) was Hillary Clinton’s Director of Policy Planning at the State Department. As a member of the Peterson-Pew Commission on Budget Reform and the Committee for a Responsible Federal Budget, Delisle had just the right credentials to draft a policy paper that would stick it to the students. The Huffington Post reported that a record $51 billion profit could be expected from the student loan shark racket cooked up by Obama. That’s greater than the earnings of America’s most profitable companies and roughly equal to the combined net income of the four largest U.S. banks by assets.

Arguably the only Democratic Senator with a shred of integrity, Elizabeth Warren stated: “I can’t support a proposal that squeezes even more profits out of our kids. In fact, I think this whole system stinks.’’

After listing these items that fell in the doom-and-gloom category, Obama raised his hand over his eyebrows like the captain of a leaking vessel and saw the sun breaking through the dark clouds. Good-god-almighty, jobs were on the horizon: “So you add it all up, and over the past 40 months, our businesses have created 7.2 million new jobs. This year, we’re off to our strongest private sector job growth since 1999.”

An honest appraisal of the job market, however, would be based on the payroll-to-population ratio, something that reflects the real health of the economy. If, for example the population of a country was one million and the number of employed doubled from 100 to 200, who would cheer about that?

On June 6th Zero Hedge reported that the payroll-to-population was worse than a year ago and that “the unemployment rate is also rising with under-employment – at 18.0% – near 15 month highs.”

There is one sector that appears booming, however. The number of minimum wage waiters and bartenders hit an all-time high of 10,339,800 workers, increasing by a 51,700 in just one month. But mixing drinks like Tom Cruise in “Cocktail” must be a lot more fun than working in some boring factory with a health plan, so it is not that troubling to learn from Zero Hedge that manufacturing jobs have dropped four months in a row, now numbering 11.964 million jobs. Pretty soon the number of bartenders, waiters, and busboys will exceed the number of factory workers. I wonder what Marxist value theorists will make of that?

Obama was also pumped up over the fact that Ford is now hiring workers for its Kansas City plant. Glory be, America is coming back! Well, one can certainly understand why Ford would want to increase the number of workers in Kansas City since it cut a deal with the UAW that entry-level workers will be paid $16 per hour, just about the same amount that fast food workers in New York are struggling to win. Not only that, it will take a lot longer to get a raise. That’s about $31,000 per year, good enough for a mobile home and a night out once a week at the local Burger King. No wonder the UAW bureaucrats got out the vote for Obama in 2012. They, Obama, and the Ford bosses see eye to eye.

Obama made sure to get everybody on board the fracking bus. “We produce more natural gas than any country on Earth. We’re about to produce more of our own oil than we buy from abroad for the first time in nearly 20 years.” That’s great. With shale oil produced by fracking, we’ll be able to take advantage of all those new bartenders to get a pint of beer rather than put up with water catching fire as it flows from your faucet at home.

To make sure that Rachel Maddow will continue to coo over him, Obama made sure to throw in some cheap demagogy:

Even though our businesses are creating new jobs and have broken record profits, nearly all the income gains of the past 10 years have continued to flow to the top 1 percent. The average CEO has gotten a raise of nearly 40 percent since 2009. The average American earns less than he or she did in 1999. And companies continue to hold back on hiring those who’ve been out of work for some time.

Oooh, agitating against the top 1 percent. The Kenyan Marxist is at it again.

One understands why Obama would have to throw in a few words like these. Not only do they come cheap, at least those still laboring under the illusion that the capitalist system is redeemable can con themselves into believing that the President really cares.

Those illusions might finally be breaking down. Who cannot be cheered by the sight of fast food workers calling a one-day strike in New York? As the one host on MSNBC with a smidgen of liberalism left, Chris Hayes had on three people involved with the action last night, as well as my own Congressperson Carolyn Maloney who was on the picket line. Theirs is the voice of a new labor movement. It is a sign of its strength that it can draw upon Maloney for support:

HAYES: We`re talking about the fast food strike under way across the country tonight. Still with me at the table, Tsedeye Gebreselassie from the National Employment Law Project, McDonalds worker, Kareem Starks who is striking and Gregory Reynoso from Fast Food Forward, and joining us is Congresswoman Carolyn Maloney, Democrat from New York. Great to have you here, Congresswoman.

REPRESENTATIVE CAROLYN MALONEY (D), NEW YORK: Great to be here.

HAYES: Gentlemen, I want to get your reaction to the bite I played. If people are feeling they`re not being paid adequately, they have to go find a job someplace elsewhere paid higher wages. What`s your response to that? Just go get a higher wage job.

STARKS: You know, I work for McDonald`s for, like, five months. Before that, I worked for the Parks Department, climbing trees. I made $10.25 more than what I`m making now. So I`ve had a better job, and I was never in poverty like I am now. But whoever is, like, against it, obviously isn`t ever made $7.25 and never tried to budget paying for two kids and an apartment and bills and food all for $7.25.

HAYES: My sense, Gregory, if there were jobs available that paid higher wages, you would be happy to take them.

REYNOSO: Yes, I would be happy. The point is, it`s not these types of opportunities for everybody. There are not a lot of people what can really go out and find these types of jobs. That`s why people have to live on $7.25.

HAYES: Congresswoman, it`s fairly unusual to find members of Congress walking the picket line. There were a number. Why were you out there?

MALONEY: Well, I was looking for you, Chris.

HAYES: I was prepping this segment.

MALONEY: We were out there to show solidarity, the fight we have before Congress. We have a bill before Congress, HR-1010. We have 142 co- sponsors, 30 in the Senate and it would raise the minimum wage to $10.10, over 3 years, 95 cents a year. The president even in 2009 was calling for minimum wage increase in his state of the union and, of course, last week in Illinois. It`s a priority of his. It`s a priority of ours. We`re working hard to pass it.

HAYES: In the past, raising the minimum wage, you`ve been able to get some Republicans to vote for it. There was a minimum wage raised under George W. Bush that happened. There were a number of Republican votes. Is the Republican Party, do you think you can find people on the other side of the aisle who would vote for this bill?

MALONEY: I believe it merits bipartisan support and we`ll certainly be working to secure it. You`re not going to secure it if you don`t try.

HAYES: That doesn`t occur to me very much.

MALONEY: We`re going to try. We`re going it try because it`s too important and talking to Greg and Kareem, you see the importance of it. I believe you`re working two jobs.

REYNOSO: Yes.

MALONEY: He doesn`t have time to sleep. He`s working two jobs and it`s hard.

STARKS: I actually work the overnight shift last night and I`m here now.

HAYES: Thank you for coming in.

STARKS: I just, like, want to thank everybody for the support.

HAYES: Tsedeye, when I was talking to Kareem and Gregory about this idea that if you want a better job then go get a job that pays a higher wage what is happening right now in this economy, I don`t think this is underappreciated. The jobs are being created at the bottom of the wage scale. That is a trajectory that many Americans are experiencing.

GEBRESELASSIE: Kareem`s story is the story of our economy and how our labor markets have shifted so we`ve like hemorrhaged these decent paying jobs. What`s taking its place jobs that pay low wages like fast food and retail. Not only are those the jobs that are being created. They`re also jobs where real wages are actually declining, you know, since —

MALONEY: Out of the 3.2 million low-income jobs, 2/3 of them are women. Women are disproportionately in these low-income jobs.

GEBRESELASSIE: They`re also adults. That`s the other thing.

MALONEY: They always say they`re teenagers. They`re not. Most of them are —

HAYES: Were your co-workers, your co-workers, the image is, like, these are teens on summer jobs. Your co-workers were supporting families.

REYNOSO: Yes.

STARKS: There`s a few co-workers I know that has kids and supporting families and paying bills and stuff like that. I mean, it`s probably — McDonald`s and fast food chains usually target younger kids or whatever, but at the end of the day, there are still older people that have these jobs. There`s, like, a 60-year-old lady in my store.

GEBRESELASSIE: The median age for a fast food worker in this country is 29 years old.

HAYES: Wow.

GEBRESELASSIE: That is an adult. The other thing the industry says these are stepping stone jobs.

HAYES: You could rise up in the ranks.

GEBRESELASSIE: That`s just not the case. There`s limited opportunities for advancement.

REYNOSO: People from 50 years old, they`ll be working in these companies. Imagine those people supporting families.

HAYES: Will you quickly show that mobility graphic? It`s 2.2 percent jobs in the fast food industry are managerial, professional and technical occupations.

GEBRESELASSIE: The vast majority, 90 percent are frontline occupations. The median wage is $8.94 an hour.

HAYES: Compared to all industries, 31 percent —

MALONEY: It hasn`t gone up in four years.

HAYES: And it hasn`t gone up in four years. Tsedeye Gebreselassi from the National Employment Law Project, McDonalds worker, Kareem Starks, Gregory Reynoso from Fast Food Forward, and Congresswoman Caroline Maloney from New York, thank you all.

March 20, 2013

Catastrophism and the left: a response to Sasha Lilley

Sasha Lilley

Although I was aware that West Coast radio host Sasha Lilley, a kind of radical version of Terry Gross, had come out with a book on “Catastrophism”, I had no plans to read it or comment on it until I spied a review in Brooklyn Rail, a free monthly you can find at better bookstores.

Titled “The Bankruptcy of Doom and Gloom”, reviewer Robert S. Eshelman writes:

Lilley observes that while the New Deal did, in fact, originate in response to the Great Depression, the great American strike waves of 1898 to 1904 and 1916 to 1920 occurred during periods of relative economic prosperity.

I found so many things wrong with this that I decided to have a look at more of what comrade Lilley had to say. Fortunately, you can read her entire chapter in “Catastrophism: The Apocalyptic Politics of Collapse and Rebirth” on Google books. And I did. To start with, I have no idea which “great American strike wave” of 1898 to 1904 or 1916 to 1920 Lilley can possibly be referring to. I am fairly well versed in American labor history and have no idea what she is talking about.

Workers struck throughout the early 1960s for that matter. This was a time when the UAW, the Teamsters, and the railway unions went out on strike for substantial wage increases all the time. During the brief time I was a public school teacher in the late 60s, Albert Shanker was one of the most “militant” trade unionists in the U.S. if going out on strike is some kind of litmus test. This was the guy after all who resulted in civilization being destroyed after he got his hands on a nuclear weapon, as the Doctor told Woody Allen in “Sleeper” after he awoke. That’s pretty militant but I don’t think that’s the sort of thing Lilley had in mind.

But the kinds of strikes that capture our attention as Marxists are not the Samuel Gompers inspired affairs for higher wages. Instead we study what happened in Flint, Michigan in 1936 and 1937 when workers occupied factories and battled the cops and National Guard. This was a strike that began to educate workers about FDR back-stabbing the CIO. Like it and so many other major class battles of the 1930s, it eventually came to naught because the Communist or Social Democratic leadership (Victor and Walter Reuther in the case of the UAW) was determined to back FDR. If the trade union movement had broken with the Democrats and launched a labor party, American politics would look a lot different today. Trust me.

While most of Lilley’s barbs are aimed at the lunatic fringe, from the nuclear-war advocating Juan Posadas of the Fourth International to the Weathermen, she snares Henryk Grossman into her industrial-sized seine. She accuses Grossman of “collapsism” on the basis of his observation:

Despite the periodic interruptions that repeatedly defuse the tendency towards breakdown, the mechanism as a whole tends relentlessly towards its final end with the general process of accumulation… Once these countertendencies are themselves defused or simply cease to operate, the breakdown tendency gains the upper hand and asserts, itself in the absolute form as the final crisis.

Surely anybody with even a smattering of knowledge about Grossman’s theories of capital accumulation would understand that he posited the “escape valve” that the system used to postpone such a final crisis. Chapter 3 of Grossman’s 1929 “Law of the Accumulation and Breakdown” is titled “Modifying Countertendencies”. I don’t think it’s hard to figure out that any chapter with such a title will provide the evidence needed to clear Grossman of the charge of “collapsism”.

At the start of the chapter, Grossman identifies conditions that must be met in order for the “final crisis” to ensue. The first one is “that the capitalist system exists in isolation – that there is no foreign trade”. Fat chance of that, I’d say. As Grossman puts it:

Considering the gigantic increases in productivity and the enormous accumulation of capital of the last several decades the question arises —why has capitalism not already broken down? This is the problem that interests Marx:

the same influences which produce a tendency in the general rate of profit to fall, also call forth counter-effects, which hamper, retard, and partly paralyse this fall. The latter do not do away with the law, but impair its effect. Otherwise, it would not be the fall of the general rate of profit, but rather its relative slowness, that would be incomprehensible. Thus, the law acts only as a tendency. And it is only under certain circumstances and only after long periods that its effects become strikingly pronounced. (1959, p. 239)

Once these counteracting influences begin to operate, the valorisation of capital is reestablished and the accumulation of capital can resume on an expanded basis. In this case the breakdown tendency is interrupted and manifests itself in the form of a temporary crisis. Crisis is thus a tendency towards breakdown which has been interrupted and restrained from realising itself completely [emphasis added].

If you stop and think about it, this is not that much different from what David Harvey has said about  “spatial fix” or Rosa Luxemburg’s theory of primitive accumulation that Harvey has endorsed.

Speaking of which, despite accepting Rosa Luxemburg’s proviso that capitalism can forestall collapse through colonization, whether formally or informally, the stern judge Lilley still refuses to excuse her from the charge of “collapsism”. Parenthetically, while one cannot expect Lilley to have offered up a counter-analysis on the current stage of capitalism, isn’t it obligatory to take the collapse of the USSR, the Eastern European states, China, and Vietnam into account when offering blithe reassurances about the vitality of the capitalist system? One would never consider the possibility that capitalism will collapse of its own internal mechanisms, but hasn’t the opening up of huge markets and supplies of cheap labor given the system a new lease on life? Of course, Lilley might respond that this is what she has been talking about all along. That being the case, she owes Grossman and Luxemburg an apology for transforming them into “catastrophists” when her own analysis and theirs differs so little. Oh well, I’ll do it for her. “Henryk and Rosa, Sasha says she’s sorry.”

All this being said, I do agree that catastrophism is a problem in the Marxist movement (as opposed to the freak show on parade in her chapter.) Towards the end of WWII the American Trotskyist movement had a debate over the leadership’s catastrophist notion that the end of WWII would result in economic collapse and proletarian revolution. Felix Morrow challenged that view as I reported in an article I wrote about 17 years ago:

One of the main areas of contention between Morrow and the leaders of the FI was how these differences in policy would play out against the background of German politics. The SWP was convinced that the German working-class would lead the rest of Europe in the fight for socialism. A document states: “the German revolution constitutes the essential base of the European revolution, that it alone can provide the indispensable, genuinely harmonious political and economic organization for the Socialist United States of Europe.”

Morrow disagreed completely with these projections. He stated that the document contains not “a single reference to the fact that the German proletariat would begin its life after Nazi defeat under military occupation and without a revolutionary party.”

What was the source of these false projections? “To put it bluntly: all the phrases in its prediction about the German revolution — that the proletariat would from the first play a decisive role, soldiers’ committees, workers’ and peasants’ soviets, etc. — were copied down once again in January 1945 by the European Secretariat from the 1938 program of the Fourth International. Seven years, and such years, had passed by but the European Secretariat did not change a comma. Exactly the same piece of copying had been done by the SWP majority in its October 1943 Plenum resolution in spite of the criticisms of the minority.” Evidently dogmatism is not a recent trend in the Trotskyist movement.

Morrow stood his ground against all attacks. He appeared as a heretic. One of the charges against him made by Pierre Frank contained an interesting thought. If Morrow was right, what implications would this have for the world Trotskyist movement? Frank seemed to be thinking out loud when he said:

The false perspective of Morrow has a farther implication if it is really drawn to its logical end. If American imperialism has such inexhaustible powers that it can, as he thinks, improve the standard of living in Europe, then of course there exists a certain basis, on however low a foundation, for the establishment of bourgeois-democracy in the immediate period ahead. From that we must assume the softening of class conflicts for a period that the class struggle will be very largely refracted through the parliamentary struggle, that for a time the parliamentary arena will dominate the stage. If that were true, we would have to revise our conception of American imperialism. And of course the Trotskyist movement would have to attune its work to these new conditions — conditions for a while of slow painful growth, propaganda, election campaigns, etc., etc.

Frank’s fears were of course grounded in reality. This would be the fate of the Trotskyist movement and the rest of the left. The 1950s were not even a period of slow, painful growth, however. They were a period of decline. The FI only woke up to new realities when it shifted toward the student movement in the early 1960s. After a period of sustained growth, it returned to its “catastrophist” roots and proclaimed in 1975 that the workers were ready to launch an attack on capitalist power in the United States and the other industrialized countries. SWP leader Jack Barnes not only led this return to Comintern ultraleftism, he did the early communists one better and predicted war, fascism and proletarian revolution nearly every year or so for the last 20.

Contrary to James P. Cannon’s expectations, the post-war period through the early 70s was marked by rapid expansion of American capitalism and a period of relative prosperity for the working class. Lilley does not think that these objective conditions had much to do with the mostly white working class supporting the war in Vietnam, the racial status quo, sexism in the workplace, or the behavior stereotyped in “All in the Family”. I wish it wasn’t so but my memory of construction workers beating up antiwar students is too vivid. It may be vulgar Marxism to assert that worsening economic conditions makes it easier to persuade workers of socialist ideas but as Robert Fitch once put it, “Vulgar Marxism explains 90 percent of what’s going on in the world.”

Finally, on the question of “catastrophism” and the left. As I am thirty years older than Ms. Lilley, I have a somewhat different take on millenarianism and the left. When I used to drive around with my mom when I was 5 or 6 years old, I’d ask her if a big cumulus nimbus was a mushroom cloud. This was at a time when television was laden with doomsday messages about Russian nukes. A couple of years later I would be taking part in air raid drills at school, “ducking and covering” under my desk. It does not get much more apocalyptic than this. When I got to Bard College in 1961, I joined some upperclassmen in organizing a Welcome the Bomb Committee, a satirical jab at Governor Rockefeller who was pushing for an expansion of nuclear war shelters.

While I was still too apolitical to do anything about my fears, other students joined he Student Peace Union, a first sign of opposition to Cold War madness. Many of the people who joined the Young Socialist Alliance in the early 60s were SPU activists. They had come to the conclusion that the capitalist system threatened the survival of the human race and acted on that decision.

My turn came 6 years later as I faced being drafted to fight in Vietnam. When a Marxist student at the New School convinced me that such wars were inevitable in the capitalist system, I had no alternative but to join the Trotskyist movement. Does that make me a catastrophist? Guilty as charged, I suppose, and likely to remain one until I die.

March 6, 2013

Caught in the sequestration web

Filed under: financial crisis,unemployment — louisproyect @ 5:57 pm

Two days ago I got a letter from NY State Unemployment telling me to show up for an appointment next week to certify for extended benefits after my current benefits expire on August 14th. I got a chuckle out of the work search record I was supposed to bring with me. There were 10 rows, one for each prospective employer you contact each week.

Aren’t these people aware that once you reach the age of fifty or so, the chance of getting a job in your field is about the same as winning the American Idol contest? The NY Times reported on February 2nd:

In the current listless economy, every generation has a claim to having been most injured. But the Labor Department’s latest jobs snapshot and other recent data reports present a strong case for crowning baby boomers as the greatest victims of the recession and its grim aftermath.

These Americans in their 50s and early 60s — those near retirement age who do not yet have access to Medicare and Social Security — have lost the most earnings power of any age group, with their household incomes 10 percent below what they made when the recovery began three years ago, according to Sentier Research, a data analysis company.

Their retirement savings and home values fell sharply at the worst possible time: just before they needed to cash out. They are supporting both aged parents and unemployed young-adult children, earning them the inauspicious nickname “Generation Squeeze.”

New research suggests that they may die sooner, because their health, income security and mental well-being were battered by recession at a crucial time in their lives. A recent study by economists at Wellesley College found that people who lost their jobs in the few years before becoming eligible for Social Security lost up to three years from their life expectancy, largely because they no longer had access to affordable health care.

“If I break my wrist, I lose my house,” said Susan Zimmerman, 62, a freelance writer in Cleveland, of the distress that a medical emergency would wreak upon her finances and her quality of life. None of the three part-time jobs she has cobbled together pay benefits, and she says she is counting the days until she becomes eligible for Medicare.

In the meantime, Ms. Zimmerman has fashioned her own regimen of home remedies — including eating blue cheese instead of taking penicillin and consuming plenty of orange juice, red wine, coffee and whatever else the latest longevity studies recommend — to maintain her health, which she must do if she wants to continue paying the bills.

“I will probably be working until I’m 100,” she said.

This morning I went to the Unemployment website to file a weekly claim and found this bit of news there:

ALERT: Federal cuts to extended unemployment benefits (beyond 26 weeks)

Updated March 1, 2013

Beginning with the week ending April 7th, federal government budget cuts known as sequestration could affect your unemployment insurance benefits.  If you are receiving regular UI benefits you will NOT see any change.  However, if you are receiving federal extended unemployment benefits that start after 26 weeks, the federal government has directed us to reduce your payments by 10.7% beginning that first week in April.  New York State has no control over these cuts in benefits and no ability to waive or reduce the level of cuts.  If you are going to be affected, you will receive a letter during the month of March telling you your exact benefit amount.  Please check this website for the most up to date information concerning the sequestration cuts.  And please be aware that our telephone call center agents do not have any more up to date information, so it is best to use our webpage, Facebook page or contact the United States Department of Labor at 1-866-487-2365, the White House at 202-456-1414 or your member of Congress at 202-224-3121.

What this means is that the 14 weeks of extended benefits I am eligible for after August 14th will be cut from $404 to $360. Now as it turns out my situation is not as dire as most facing such cuts. My wife is a full-time professor who makes a decent income, while I am collecting Social Security payments of $2400 per month. But what if I was 58 instead of 68, single, and living in a typical Manhattan apartment that rents $2000 per month for a studio? That easily could have been me.

Gawker has been running a series on the unemployed, including this tale of woe from someone who had been working in information technology for 9 years:

One evening, four months later, in January, 2010, I got a call at home from work, which was unusual. I was told that my position would be eliminated in favor of contractors, who would develop an e-commerce platform in house. The department head thanked me for my five years of work (it was actually 9, but she didn’t know that; she had only started six months before) and that was that. I kept updating the blogs in the normal way, but someone seemed to notice the snarky tone that the blogs suddenly seemed to take, and complained to the company. I got a phone call asking if I knew what the blogs were, and who updated them. I told them that I no longer worked there and did not normally give out advice for free, but that if there were domains out there that they owned and had control of, it might be considered a liability.

I have not held a full-time job since. I am either “overqualified” (too old), “lack proper qualification” (I have no degree) or I “don’t fit the company culture” (am not pretty enough to be a marketing director).

I have been staving off the sheriff by making crappy landing-page type websites for fly-by-nights that want to increase their Google rankings on their real websites, or by working phone banks, or by playing standup bass in bluegrass bands. There has not been a single month in the last two years where I have made more than $1200. My modest mortgage payment is $1198. My three children and I are living on a $420 SNAP benefit. My wife, who does actually have a degree, got a part time, temp job at the local library after they laid off all the regular employees and hired temps. She left about six months after the paychecks stopped.

Meanwhile the stock market keeps breaking records.

Maybe that’s a function of the New New Economy:

NY Times March 3, 2013
Recovery in U.S. Is Lifting Profits, but Not Adding Jobs
By NELSON D. SCHWARTZ

With the Dow Jones industrial average flirting with a record high, the split between American workers and the companies that employ them is widening and could worsen in the next few months as federal budget cuts take hold.

That gulf helps explain why stock markets are thriving even as the economy is barely growing and unemployment remains stubbornly high.

With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers.

“So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.”

The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India.

These factors, along with the Federal Reserve’s efforts to keep interest rates ultralow and encourage investors to put more money into riskier assets, prompted traders to send the Dow past 14,000 to within 75 points of a record high last week.

While buoyant earnings are rewarded by investors and make American companies more competitive globally, they have not translated into additional jobs at home.

Other recent positive economic developments, like a healthier housing sector and growth in orders for machinery and some other durable goods, have also encouraged Wall Street but similarly failed to improve the employment picture. Unemployment, after steadily declining for three years, has been stuck at just below 8 percent since last September.

With $85 billion in automatic cuts taking effect between now and Sept. 30 as part of the so-called federal budget sequestration, some experts warn that economic growth will be reduced by at least half a percentage point. But although experts estimate that sequestration could cost the country about 700,000 jobs, Wall Street does not expect the cuts to substantially reduce corporate profits — or seriously threaten the recent rally in the stock markets.

“It’s minimal,” said Savita Subramanian, head of United States equity and quantitative strategy at Bank of America Merrill Lynch. Over all, the sequester could reduce earnings at the biggest companies by just over 1 percent, she said, adding, “the market wants more austerity.”

As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966. In recent years, the shift has accelerated during the slow recovery that followed the financial crisis and ensuing recession of 2008 and 2009, said Dean Maki, chief United States economist at Barclays.

Corporate earnings have risen at an annualized rate of 20.1 percent since the end of 2008, he said, but disposable income inched ahead by 1.4 percent annually over the same period, after adjusting for inflation.

“There hasn’t been a period in the last 50 years where these trends have been so pronounced,” Mr. Maki said.

At the individual corporate level, though, the budget sequestration could result in large job cuts as companies move to protect their bottom lines, said Louis R. Chenevert, the chief executive of United Technologies. Depending on how long the budget tightening lasts, the job cuts at his company could total anywhere from several hundred to several thousand, he said.

“If I don’t have the business, at some point you’ve got to adjust the work force,” he said. “You always try to find solutions, but you get to a point where it’s inevitable.”

The path charted by United Technologies, an industrial giant based in Hartford that is one of 30 companies in the Dow, underscores why corporate profits and share prices continue to rise in a lackluster economy and a stagnant job market. Simply put, United Technologies does not need as many workers as it once did to churn out higher sales and profits.

“Right now, C.E.O.’s are saying, ‘I don’t really need to hire because of the productivity gains of the last few years,’ ” said Robert E. Moritz, chairman of the accounting giant PricewaterhouseCoopers.

(clip)

January 16, 2013

Is Growth Over?

Filed under: economics,financial crisis — louisproyect @ 2:59 pm

(I was invited to write a short article for an Indian journal that will be translated into Hindi on the question of “Crisis of Capitalism and Challenges of Marxism”. This is what I wrote.)

The question of capitalist crisis is being posed in a manner for the core industrial nations in a way that has not been seen since the 1930s. While few would doubt the severity of the recession at its height, there has been a tendency to see capitalism as now being in the recovery phase of the business cycle. For example, the unemployment rate in the U.S. is now at 7.7 percent, the lowest in 4 years. Despite this uptick, most of Europe remains mired in Eurozone depths.

One of the key questions facing the left is the long-term viability of the capitalist system. If you base yourself on the theory that the system is governed by cycles of boom and bust, the logical conclusion one might draw is that our chances for an all-out confrontation disappeared with the easing of the unemployment picture. This coupled with the decline of the Occupy movement can give one the impression that the system has stabilized itself for the time being.

From within the capitalist ideology camp, there has been a distaff note of some significance. Nobel Prize winning economist Paul Krugman, who is as committed to “globalization” as his fellow N.Y. Times op-ed columnist Thomas Friedman, asked the $64,000 question recently: does technological advance lead to the creation of new jobs? This is the base assumption of Schumpeter’s “creative destruction”, a theory that can be described as a vulgarization of the capital accumulation cycle described in Volume Two of Marx’s Capital.

On December 9th 2012, Krugman directed his attention to the replacement of living labor by machinery in a column that he described as “an old-fashioned, almost Marxist sort of discussion”:

In a recent book, “Race Against the Machine,” M.I.T.’s Erik Brynjolfsson and Andrew McAfee argue that similar stories are playing out in many fields, including services like translation and legal research. What’s striking about their examples is that many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers.

Still, can innovation and progress really hurt large numbers of workers, maybe even workers in general? I often encounter assertions that this can’t happen. But the truth is that it can, and serious economists have been aware of this possibility for almost two centuries.

Krugman posed an even deeper challenge to capitalist orthodoxy on the 27th of December in a column titled “Is Growth Over”. It referred to the research of an economist named Robert Gordon:

Recently, Robert Gordon of Northwestern University created a stir by arguing that economic growth is likely to slow sharply — indeed, that the age of growth that began in the 18th century may well be drawing to an end.

Mr. Gordon points out that long-term economic growth hasn’t been a steady process; it has been driven by several discrete “industrial revolutions,” each based on a particular set of technologies. The first industrial revolution, based largely on the steam engine, drove growth in the late-18th and early-19th centuries. The second, made possible, in large part, by the application of science to technologies such as electrification, internal combustion and chemical engineering, began circa 1870 and drove growth into the 1960s. The third, centered around information technology, defines our current era.

If this is true, then Marxism is presented by a set of circumstances that have never been seen before. When the Communist Manifesto was written, capitalism was revolutionizing the means of production everywhere.

The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.

But what if the “heavy artillery” has turned into a peashooter? What are the political consequences for a social system that cannot continue to expand the needs of a growing population, especially in the developing countries? Left Keynesian economist Joan Robinson once wrote, “…the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.” If working people cannot expect to be a wage slave, then what other options do they have except to confront the social system that they have made a compact with for centuries? For all of the tendencies to look at the Arab Spring as a movement against despotic regimes (and rightly so), the underlying failure of the capitalist system to provide the basic necessities of life was what fueled the revolt. When a street peddler set fire to himself in Tunisia, it was his way of saying that the system was not working for him. When a Greek pensioner took his life in front of the parliament building last year, he was making a similar statement.

With class lines being drawn more sharply than at any time since the 1930s, the Marxist left must rise to the occasion. Keeping in mind that the Latin American left led by Hugo Chavez has called for a 21st Century Socialism, we must consider what this means for revolutionaries in countries like the U.S., Germany, Britain or France. While the working class remains relatively quiescent in such countries (largely a function of the deindustrialization Krugman is concerned about), there is little doubt that struggles will continue even if they do not assume the same character they did in the 1930s. The Occupy movement was the first sign of that and we should be alert to future manifestations. The ruling class is prepared for us and we should be equally prepared for the monumental battles to come.

 

December 20, 2012

Argentina, vulture funds, and Thomas Griesa

Filed under: Argentina,economics,financial crisis,imperialism/globalization — louisproyect @ 9:00 pm

Thomas Griesa

My first exposure to “vulture funds” was at the 2010 Left Forum in NY, where I walked into a BBC documentary by Greg Palast that was in progress. Although I didn’t care for Palast’s Michael Moore-like shtick as he accosted and badgered the financiers who buy up the debt of poor countries at reduced prices and then sue them to get inflated repayments, I was glad to see attention paid to what Woody Guthrie once referred to as bankers robbing people with a fountain pen.

Although I didn’t make the connection at the time, this comment on my blog from an Argentinian who was subscribed to the Marxism list that preceded Marxmail was dealing with the same kind of larceny:

Hi, dear Louis. I’m Julio Fernández Baraibar, your friend from Buenos Aires. I lost the contact with you, but I remember you very heartly.

We are struggling just now against the decision of Judge Griesa and I remembered that you, once, told something about him in relation with somo trotskist militants. Do you remember the case?

I wait for your response.

Greetings

In 2001 Argentina’s economy had totally collapsed, foreshadowing in many ways what has befallen most of southern Europe. It defaulted on $95 billon worth of bonds. When Nestor Kirchner took office in 2003 he proposed that Argentina offer new bonds paying 30 cents for each dollar owed in default, an offer accepted by 93 percent of the original bondholders.

A couple of bondholders held out, however. One was NML and the other was Aurelius Capital Management Inc., both who insisted on getting 100 percent of the face value of the bonds. On October 26th Judge Thomas Griesa ruled in their favor, forcing Argentina to pay $1.4 billion. NML was particularly aggressive in pressing their demands, winning a court order to detain an Argentine naval vessel in a Ghana port as a kind of hostage. (On December 17 the U.N. ruled that the ship had to be released.)

The June 10, 2011 Irish Times described the strategy of Aurelius:

MANHATTAN-BASED lawyer Mark Brodsky named his hedge fund after the Roman emperor Marcus Aurelius, a Stoic philosopher.

He set up the fund in 2005 but Brodsky fine-tuned his skills as a distressed debt investor over nine years at Elliot Associates, a hedge fund known for taking on sovereign states that defaulted on debt, particularly Peru and Argentina.

The strategy he learnt at Elliot was straightforward buy debt on the cheap and then run a legal campaign to recover a higher value. This is the art of the vulture fund which sees value in high-risk investments in the debts of financially stricken firms and countries.

A recent win for Aurelius was its purchase of just $5 million out of $25 billion in debt at Dubai World, the state-owned investment fund, for 50 cents in the dollar.

NML is a subsidiary of Elliot Associates, the forenamed vulture fund. Paul Singer is the CEO and a major player in rightwing politics, having contributed millions of dollars to the Romney campaign, serving as the chairman of the Manhattan Institute, and funding the American Spectator, a key rightwing magazine. During the Occupy movement’s heyday, a Spectator reporter named Patrick Howley basically functioned as an agent provocateur by his own admission:

This weekend, journalist Patrick Howley of the American Spectator admitted infiltrating the Occupy DC protest and leading a charge into the Smithsonian Air and Space Museum which resulted in his and several other protestors’ being hit with pepper spray. His explanation? The protesters had been ruining his story of how crazy they were by failing to think of this course of action on their own.

In his original story on the subject (now removed from the Spectator site) Howley noted: “As far as anyone knew I was part of this cause — a cause that I had infiltrated the day before in order to mock and undermine in the pages of The American Spectator — and I wasn’t giving up before I had my story.”

Argentina’s minister of the economy Hernán Lorenzino reacted angrily to Griesa’s decision, calling it “a kind of legal colonialism” and that all “we need now is for Griesa to send us the Fifth Fleet.”

On November 29 the United States Court of Appeals for the Second Circuit issued a stay on Griesa’s order. Ironically one of the factors favoring Argentina is the determination of some other scumbag hedge funds to keep NML and Aurelius from getting their way.

Chief among them is Gramercy Funds Management that holds the discounted Argentine bonds as a tax shelter for its clients. It fears that a full-blown nationalist response by Argentina to default once again will harm its own profit-seeking interests. In many ways the rivalry between Gramercy and NML/Aurelius is like a war between rival mafia gangs over who will control a legitimate business.

There’s another mafia gang that has taken Gramercy’s side in all this, namely the U.S. government that worries about the turbulence that would ensue if Argentina defaulted. Reuters reported on December 13:

U.S. government lawyers reiterated their position that the court’s interpretation of the “equal treatment” clause in Argentina’s defaulted bonds “may adversely affect future voluntary sovereign debt restructurings, the stability of international financial markets, and the repayment of loans extended by international financial institutions.”

The U.S. government argued this point in April with an amicus brief when Argentina first appealed the original court orders made by U.S. District Court Judge Thomas Griesa in Manhattan.

Let me conclude with a word or two about Thomas Griesa who is now 82 years old. A life-long Republican, Griesa was appointed to the United States District Court for the Southern District of New York by Richard Nixon in 1972.

In that capacity Griesa served as the judge in the landmark suit that the Socialist Workers Party filed against the FBI in 1973 for its decades-long disruption of party activities, including the burglaries and poison pen letters that victimized many members including me.

In between jobs at the time, I was able to attend many sessions of the trial and observed Griesa as entirely fair-minded despite his Republican roots. In one of the more memorable exchanges, he allowed Stephen Cohen to make the case that the Russian Revolution was a massively supported movement despite constant objections by the FBI lawyers. He decided in favor of the SWP claims but disappointed us by awarding us only $264,000, a relative pittance compared to the $28 million we had demanded.

The irony of course is that in the final analysis we ourselves destroyed the party far more efficiently than the FBI bumbling ever could. Let’s hope that Argentina proves far more resilient since—after all—the Latin American revolution that “Kirchnerism” is a constituent part of has a lot more importance than we ever had.

November 12, 2012

Who says the Koch Brothers and Sheldon Adelson wasted their money?

Filed under: capitalist pig,financial crisis,parliamentary cretinism — louisproyect @ 8:54 pm

David and Charles Koch

Sheldon Adelson

One of the things heard incessantly since Election Day is that the Koch brothers and Sheldon Adelson did not get their money’s worth. Alternet’s R.J. Eskow spoke for many of his co-religionists:

I should be a better person than this, but I take no small amount of satisfaction in knowing that Sheldon Adelson and the Koch Brothers wasted lots and lots and lots of money this year.

It is necessary to put this into perspective. The Koch brothers spent $400 million. That represents just .008 of their combined personal fortune of fifty billion dollars. Forbes Magazine shared my perspective when it came to Adelson:

Yes, Sheldon Adelson crapped out on Election Day. But Adelson has plenty of more chips to place on the table–billions more.

True, the casino billionaire spent at least $53 million on this election cycle with little to show for the investment. And while it’s a massive amount of money for most people, and most companies, it’s pocket change for Adelson. The Las Vegas Sands boss is worth $20.5 billion. My colleague Clare O’Connor drew this great comparison yesterday: “Imagine an average person with a $100,000 net worth buying a pair of Tory Burch shoes ($250). You’d care if you lost them, but you wouldn’t be ruined.” Adelson’s $53 million is gone. The billionaire isn’t going anywhere.

Although I am not privy to the innermost calculations of such characters, I think that they share one thing with me, namely a belief that there is no room for compromises when it comes to electoral politics.

Historically this was not always the case with the Republicans. The most notable example in recent times was the presidency of Dwight D. Eisenhower who Robert Welch, the founder of the John Birch Society, described in these terms: “Could Eisenhower really be simply a smart politician, entirely without principles and hungry for glory, who is only the tool of the Communists? The answer is yes.” He also stated: “With regard to … Eisenhower, it is difficult to avoid raising the question of deliberate treason.”

It should also be noted that Fred Koch, the paterfamilias of the reactionary gang, was a founding member of the John Birch Society and that his sons’ funding of the nativist and racist Tea Party movement reflects a continuity with the past.

It is important to understand that at one time “Eisenhower Republicans” enjoyed hegemony in the party. Despite the tendency of the Communist Party and many 60s radicals to dub Richard Nixon as a looming fascist, he had plenty in common with Eisenhower, for whom he served as Vice President for two terms. In an interview with Howard K. Smith in January 1971, he said “I am now a Keynesian”. Can anybody imagine that empty suit President Obama saying something like that? This, in fact, is where he stands:

Reagan spoke to America’s longing for order, our need to believe that we are not simply subject to blind, impersonal forces, but that we can shape our individual and collective destinies, so long as we rediscover the traditional virtues of hard work, patriotism, person responsibility, optimism, and faith.

That Reagan’s message found such a receptive audience spoke not only to his skills as a communicator; it also spoke to the failures of liberal government, during a period of economic stagnation, to give middle-class voters any sense that it was fighting for them. For the fact was that government at every level had become too cavalier about spending taxpayer money. Too often, bureaucracies were oblivious to the cost of their mandates. A lot of liberal rhetoric did seem to value rights and entitlements over duties and responsibilities.

Barack Obama, Audacity of Hope, p. 31-32

Some people, especially younger people who have no memory of liberal Republicanism, believe that Ronald Reagan transformed the Republican Party. In reality, the seeds were planted in 1964 when Barry Goldwater said in his acceptance speech as Presidential candidate for the Republican Party: “I would remind you that extremism in the defense of liberty is no vice! And let me remind you also that moderation in the pursuit of justice is no virtue!” Come to think of it, he was right.

Goldwater’s aim back then was to transform the Republican Party into a conservative party. In doing so, he found a counterpart among many liberals who yearned that the Democratic Party become more purely liberal. In practice this meant purging the party of the Southern racists, something that turned out to be unnecessary after Nixon adopted his “Southern Strategy”.

Today there are no important liberal Republicans. Arguably, the last one standing was Pennsylvania Senator Arlen Specter, who defected to the Democratic Party in 2009 three years before his death. (It is not so well-known that Specter was a Democrat to start with, from 1951 to 1965.)

Unlike the Republicans, the Democrats never could be mistaken for a liberal party after George McGovern’s candidacy in 1972, at least when it came to presidential nominations. Starting with Carter, there has been a steady drift toward the ideology of the Democratic Leadership Council, a nasty collection of rightwing politicians who began defining themselves as “New Democrats” in the same spirit of Tony Blair’s “New Labour”.

In March 2009, Obama told the New Democratic Coalition, a group described by politico.com as “comprised of centrist Democratic members of the House, who support free trade and a muscular foreign policy”, that he indeed was a New Democrat.

Before Bruce A. Dixon split with Black Commentator, a website that eventually became typified by Bill Fletcher Jr.’s pro-Obama think-pieces, he wrote an article titled “In Search of the Real Barack Obama: Can a Black Senate candidate resist the DLC?”. For some reason, this must have nettled candidate Obama who took the trouble to write the ‘zine prior to his election:

Dear Black Commentator:

I read with interest, and some amusement, Bruce Dixon’s recent article regarding my campaign, and his suggestion that perhaps my positions on critical issues facing this country are somehow being corrupted by the influence of the Democratic Leadership Council (DLC).  Given that Bruce [and I] worked together back in 1992 to empower communities through organizing and the ballot box, I wish he’d taken the time to give me a call and check out his facts.

To begin with, neither my staff nor I have had any direct contact with anybody at DLC since I began this campaign a year ago.  I don’t know who nominated me for the DLC list of 100 rising stars, nor did I expend any effort to be included on the list beyond filling out a three line questionnaire asking me to describe my current political office, my proudest accomplishment, and my cardinal rules of politics.  Since my mother taught me not to reject a compliment when it’s offered, I didn’t object to the DLC’s inclusion of my name on their list.  I certainly did not view such inclusion as an endorsement on my part of the DLC platform.

This, of course, was still at the time when Obama was trying to fool some people into thinking that he had liberal credentials. After his election, he dropped any such pretenses. In his re-election bid, he made no effort to reestablish such credentials since so few people would take him seriously. Instead, his super-PAC spent hundreds of millions of dollars making the case that Romney was a greedy, out-of-touch bastard. The ads reminded me of Pee Wee Herman’s rejoinder to his tormentor Francis in “Pee Wee Herman’s Big Adventure”: “I know you are, but what am I?”

Well, I know what Obama is. He is a liberal Republican, maybe even a centrist Republican. In fact, if anybody can tell the difference between a Gerald Ford and a Barack Obama, except for their pigmentation, they have a talent for splitting hairs second to none.

Yes, Virginia, there has been a realignment in American politics, at least on the Presidential level. We have conservative Republican presidents going back to Reagan, but with the Democrats we get nominees who are indistinguishable from Gerald Ford or Howard Baker. But when one of these slobs gets elected, as happened last Tuesday, we get the liberal pundits greeting it once again as the second coming of the New Deal.

Returning to the Republican Party, the question of Koch and Adelson’s money being “wasted” deserves further interrogation. I strongly recommend a look at Chris Kromm’s very fine Southern Voice, where you can find an article by Chris titled “Did Big Money really lose this election? Hardly.” Chris writes:

The fact that TV ads are most effective with less-engaged voters might explain money’s continuing influence in state and local races, which receive far less media exposure and voters may know even less about the candidates and issues.

As Facing South and The New Yorker showed, in 2010 an onslaught of outside spending in North Carolina by outside money groups led by Republican donor Art Pope was a key factor in fueling a historic GOP takeover of the state legislature.

That put N.C. Republicans in charge of the once-a-decade redistricting process, producing new maps which the John Locke Foundation — which is largely funded by Pope’s foundation — readily admits were crucial to enabling the GOP to expand its power in the General Assembly in 2012.

Money’s state-level influence in North Carolina continued this year, too. According to FollowNCMoney.org, a money-tracking website run by the Institute for Southern Studies, more than $14 million from super PACs and other outside groups poured into N.C. state races.

Of the top 10 spending groups in North Carolina — which made up more than 90 percent of the $14 million total — seven were Republican-leaning groups, who outspent their Democratic-leaning counterparts by more than a two-to-one margin.

And unlike the national super PACs, conservative spending groups in North Carolina enjoyed a much higher winning percentage: Of the 10 races that attracted the most outside money, nine ended in Republican victories. (As for Pope, he and his operatives are well-represented in the newly-elected GOP governor’s transition team.)

But even if Koch and Adelson type funding had less of an effect in the South and elsewhere, that would not prompt such donors to wash their hands of their project, which is not limited to immediate and measurable goals. They are building a reactionary movement that is seeking to turn back the clock to 1890 or so. By spending hundreds of millions of dollars, they push the political agenda to the right. In doing so, the “centrist” politics of a self-avowed New Democrat like Obama shifts to the right along with them.

More to the point, the reactionary agenda of the Koch Brothers is ultimately shared by many corporate bosses who never would be caught dead at a Tea Party rally. Nothing symbolizes this better than The American Legislative Exchange Council (ALEC) that gained some notoriety after its heavy paws were detected in the struggle against Scott Walker in Wisconsin and, even worse, their support for “Stand Your Ground” laws that resulted in Trayvon Martin’s murder.

In the outcry over their Koch-funded skullduggery, some major corporate members were forced to drop their affiliation, including Walmart, Coca-Cola, Wendy’s, Kraft Foods, McDonald’s, the Bill and Melinda Gates Foundation, and Blue Cross/Blue Shield.

The people who run these corporations are not that interested in ideology. What they are interested in, however, is protecting their class interests. The ultimate explanation for the rightwing assault on our standard of living, our safety on the job, our right to a job, our health, and our right to express our opinion, is a declining rate of profit. While it is not within the purview of this article, and more importantly my limited expertise, to explain why there is such a tendency, suffice it to say that the good old days are gone forever. Despite the rhetoric of a Ronald Reagan on one side and a Barack Obama on the other (all proportions being guarded), well-paying jobs is a thing of the past.

I do recommend an article by Marxist economist Michael Roberts who blogs at http://thenextrecession.wordpress.com/ titled “Does it matter who wins?”, written the day before the election. It is a close look at the economic prognosis of the U.S. and concludes on this note:

For me, the bellwether for the health of US capitalism is the rate of profit.  That shows little sign of returning to levels seen in the late 1990s, let alone back to the golden age of the 1960s.  A low and probably falling rate of profit implies a low rate of new investment ahead, with unemployment staying well above ‘normal’ levels.  And it implies the likelihood of another slump in production before the next four years are over along with the continuance of the Long Depression, now in its fifth year.  And remember the Long Depression that started in 1873 lasted 20 years.

Given these prospects, the bourgeoisie will be forced to rely on the carrot and the stick—or perhaps more accurately, the soft cop and the hard cop. With declining profits, the ruling class will be forced to cut expenses both privately and publicly. Wages will be pushed down, mostly as a result of the threat of runaway shops our outright closings. Expenditures on education, health and the environment will be cut as well.

In the long run, the U.S. will look more and more like Detroit with the wealthy living in gated complexes and the poor forced to make do with less and less. Furthermore, as Hurricane Sandy demonstrates, “natural” disasters will weigh more heavily on the less privileged.

Under such circumstances, there will be mounting anger of the sort on display throughout Southern Europe. The more far-sighted members of the ruling class are planning ahead, to see what powerful and ultimately lawless measures will be necessary to suppress any revolt that threatens their hegemonic rule. And, as well, the more far-sighted members of the working class, including the intelligentsia that has thrown in its lot with this class, will be required to put together an audacious and intelligent plan of action that can meet such scum head-on and defeat it.

November 5, 2012

Does it matter who wins?

Filed under: economics,financial crisis,parliamentary cretinism — louisproyect @ 4:35 pm

Michael Roberts Blog

blogging from a marxist economist

Does it matter who wins?

Does it matter who wins the US presidential election tomorrow?  Is it Tweedledum and Tweedledee?

It is often claimed by non-Marxists that the Marxist materialist conception of history leaves no room for the role of the individual.  Individuals are just swept along by historical forces, both economic and social.  So whoever is a leader of a major hegemonic state like the US will make no difference.  And it’s true that the materialist conception of history does explain why stone age hunter gatherers of Australia or the Americas could not resist the invasion and destruction of their modes of production and civilisations by small groups of European plunderers and settlers relying on the military power and technology of capitalism.  In the end, it did not matter who the ruler of the Inca or Aztecs was or how clever the hunters in the middle of Australia  were in surviving the desert.  Even the most able and clever of them was eventually defeated by even the most inept of European invaders.

But that does not mean individuals cannot make a difference.  History makes man, but man makes history (Marx).  The role of the individual in history is very much part of Marxism, as any reading of Marx’s 18th Brumaire masterpiece on the rise of Louis Bonaparte shows.  But the actions of individuals have to be placed in context.  And the context of this election suggests that whoever wins will not alter the US economy much or the livelihoods of American citizens.

full: http://thenextrecession.wordpress.com/2012/11/05/does-it-matter-who-wins/

October 30, 2012

What to make of the “encouraging” 7.8 percent unemployment rate

Filed under: economics,financial crisis — louisproyect @ 6:36 pm

When the news came out on October 5th that the unemployment rate had dropped to 7.8 percent, the Obama administration embraced the numbers as proof that its policies were working. The NY Times, one of the president’s most consistent supporters, reported that day:

The jobless rate abruptly dropped in September to its lowest level since the month President Obama took office, indicating a steadier recovery than previously thought and delivering another jolt to the presidential campaign.

The improvement lent ballast to Mr. Obama’s case that the economy is on the mend and threatened the central argument of Mitt Romney’s candidacy, that Mr. Obama’s failed stewardship is reason enough to replace him.

The Romney campaign counterattacked on two fronts. First, the candidate asserted that 7.8 percent is “not what a real recovery looks like”—a position that the left can share even as it opposed Romney’s neo-Victorian economic solutions. Second, its supporters claimed that the numbers were bogus. Chief among them was Jack Welch, the former CEO of General Electric, tweeting on October 5th: “”Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change number.”

Nobel Prize winner Paul Krugman used his op-ed perch at the NY Times to answer Welch:

Leading the charge of what were quickly dubbed the “B.L.S. truthers” was none other than Jack Welch, the former chairman of General Electric, who posted an assertion on Twitter that the books had been cooked to help President Obama’s re-election campaign. His claim was quickly picked up by right-wing pundits and media personalities.

It was nonsense, of course. Job numbers are prepared by professional civil servants, at an agency that currently has no political appointees. But then maybe Mr. Welch — under whose leadership G.E. reported remarkably smooth earnings growth, with none of the short-term fluctuations you might have expected (fluctuations that reappeared under his successor) — doesn’t know how hard it would be to cook the jobs data.

On October 11th, Jack Welch used the Wall Street Journal (what, you were expecting the Nation Magazine?) to defend his tweet:

The Obama campaign and its supporters, including bigwigs like David Axelrod and Robert Gibbs, along with several cable TV anchors, would like you to believe that BLS data are handled like the gold in Fort Knox, with gun-carrying guards watching their every move, and highly trained, white-gloved super-agents counting and recounting hourly.

Let’s get real. The unemployment data reported each month are gathered over a one-week period by census workers, by phone in 70% of the cases, and the rest through home visits. In sum, they try to contact 60,000 households, asking a list of questions and recording the responses.

Some questions allow for unambiguous answers, but others less so. For instance, the range for part-time work falls between one hour and 34 hours a week. So, if an out-of-work accountant tells a census worker, “I got one baby-sitting job this week just to cover my kid’s bus fare, but I haven’t been able to find anything else,” that could be recorded as being employed part-time.

Left economist Jack Rasmus, who shares the ex-GE CEO’s first name as well as his skepticism about the BLS statistics, wrote:

The current population survey (the 873,000) represents a statistical operation on raw jobs data that adjusts that raw (i.e. actual) jobs data by means of several statistical operations–i.e. seasonality, etc.—to get to the 873,000.  But before the raw data is statistically adjusted, another source of raw data is added to the initial data and only after that is the statistical adjustment carried out. This second source is jobs data estimated from assumptions about New Business Formation that are lagged up to nine months.

Here’s how it works. The labor department assumes net new businesses are formed nine months previous. That would be last November-December 2011. These data on new business formation are very inexact. It’s not actual new businesses but an assumed historical average of new businesses. So the past years in which new business formation was high is substitute for the more recent period when new business formation is in fact low, or even negative. It’s really a  shaky estimation process.

Doug Henwood responded to Rasmus but only to defend the legitimacy of the statistics rather than the Obama administration’s neoliberal economic policies:

This is completely wrong. The business formation estimates figure into the establishment survey, the monthly survey of almost 500,000 worksites – more info here:

  http://www.bls.gov/ces/.

That survey is the principal source of the headline job gain/loss figures. The household survey – of 60,000 households – is independent of the establishment survey. The unemployment figures and this CPS 873,000 figure come from the HH survey. It’s the result of asking people if they’ve been working, looking for work, neither, etc. More detail on the HH survey here:

  http://www.bls.gov/cps/faq.htm#Ques1

The HH survey has nothing to do with the establishment survey. There are no assumptions about new business formation at all. It just comes from asking people questions and adding up their answers. It’s very volatile – you need a change of 400,000 to reach statistical significance. The employment numbers bounce around a lot. You can get +800,000 one month and -500,000 the next. The raggedness evens out over the course of a year, but monthly changes should be taken with a grain of salt, or three.

Without mentioning his name, Rasmus seemed to have responded to Doug’s critique on October 10th, which led to a follow-up once again from Doug.

Speaking for myself (and who else matters?), I am ready to accept the statistics at face value but wonder if Jack Welch had a point on part-time work. I say this as someone with direct experience in the area since I am currently on unemployment, the benefit of having my position eliminated at Columbia University.

My unemployment benefits are $405 per week. If I didn’t have a spouse who was making a decent income as a tenure-track professor, I would be forced to re-enter the job market under duress especially if was not receiving social security benefits as well. So if I was a 40-year-old unemployed computer programmer, I might have landed a part-time job on a help-desk somewhere that paid $455 per week or so. This puts me $455 over the unemployment ceiling and thus not eligible for benefits. But how can you live on $455 per week when your rent is something like $1200 per month or so, the price of a modest studio apartment in New York. You are left with $100 per week for food, transportation, medical expenses, and entertainment, what have you.

As the BLS openly admitted, a spike in part-time employment contributed to the improved job figures:

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) rose from 8.0 million in August to 8.6 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

This is the greatest monthly increase in involuntary part-time work since September 2011.

To get a feel for the human dimension of those forced into the part-time arena, there is a must-read article that appeared in the October 27 NYT written by Steven Greenhouse, a relatively enlightened reporter who is rumored to be a red diaper baby. If I were teaching Marxist economics to college students, I would have them read this article that includes the following:

While there have always been part-time workers, especially at restaurants and retailers, employers today rely on them far more than before as they seek to cut costs and align staffing to customer traffic. This trend has frustrated millions of Americans who want to work full-time, reducing their pay and benefits.

“Over the past two decades, many major retailers went from a quotient of 70 to 80 percent full-time to at least 70 percent part-time across the industry,” said Burt P. Flickinger III, managing director of the Strategic Resource Group, a retail consulting firm.

No one has collected detailed data on part-time workers at the nation’s major retailers. However, the Bureau of Labor Statistics has found that the retail and wholesale sector, with a total of 18.6 million jobs, has cut a million full-time jobs since 2006, while adding more than 500,000 part-time jobs.

Technology is speeding this transformation. In the past, part-timers might work the same schedule of four- or five-hour shifts every week. But workers’ schedules have become far less predictable and stable. Many retailers now use sophisticated software that tracks the flow of customers, allowing managers to assign just enough employees to handle the anticipated demand.

“Many employers now schedule shifts as short as two or three hours, while historically they may have scheduled eight-hour shifts,” said David Ossip, founder of Dayforce, a producer of scheduling software used by chains like Aéropostale and Pier One Imports.

This is what capitalism has always been about, after all. In its infancy, it exploited labor through the use of an 11-hour day, child labor and the like—what Marx called the extraction of absolute surplus value. In the contemporary era, the tendency is toward the use of contingency labor or part-timers.

It is ironic that firms using leading-edge technology to control costs have little to show in the way of “creative destruction”. We were told in high school that when the automobile replaced the horse, the loss of blacksmith jobs would be compensated by the growth of assembly-line jobs building cars. Now this might have been viable during the “Fordist” epoch but in a globalized capitalist economy, there is little guarantee that new, well paying, full-time jobs are in the offing. This is something that even the bourgeois ideologists are being forced to admit, as David Leonhardt reported in the NYT on October 23rd:

Some of the disconnect between the economy’s problems and the solutions offered by Washington stem from the nature of the current political debate. The presidential campaign has been more focused on Bain Capital and an “apology tour” than on the challenges created by globalization and automation.

But economists and other analysts also point to the scale of the problem. No other rich country — not Japan, not any nation in Europe — has figured out exactly how to respond to the challenges. “The whole notion of the American dream,” said Frank Levy, an M.I.T. economist, “described a mass upward mobility that is just a lot harder to achieve right now.”

For the first time since the Great Depression, median family income has fallen substantially over an entire decade. Income grew slowly through most of the last decade, except at the top of the distribution, before falling sharply when the financial crisis began.

By last year, family income was 8 percent lower than it had been 11 years earlier, at its peak in 2000, according to inflation-adjusted numbers from the Census Bureau. On average in 11-year periods in the decades just after World War II, inflation-adjusted median income rose by almost 30 percent.

Rather than to try to explain what all this means in Marxist terms, I am going to refer you—dear reader—to an exceptionally interesting analysis of the 7.8 unemployment figure by Sam Williams who blogs at http://critiqueofcrisistheory.wordpress.com. I have no idea who Williams is but I can describe him as quite a well-informed critic of the capitalist system.

In a post titled The September 2012 Unemployment Numbers and the ‘Surplus Population’, he evaluates the trustworthiness of the statistics as well as their meaning within a broader context of class relations.

Williams’s chief contribution is to challenge the underlying theoretical framework for such statistics as accepting the framework of bourgeois economics. He writes:

According to the neo-classical marginalist theory, every person has a choice between holding a job at the going wage rate for workers of their particular skills, or choosing leisure. Assuming “perfect competition” prevails in the labor market, marginalism claims that each worker can obtain a job at a wage that corresponds to the amount of value that the worker’s labor will create, assuming the potential worker chooses employment over leisure. Therefore, a large idle population is not really a problem. It is simply the consequence of a free society—as opposed to a slave society—where people are “free to choose” between employment at a wage that corresponds to the value that their labor will create if they choose employment, and leisure.

This neo-classical theory of employment and unemployment forms the basic assumptions used by capitalist governments when they calculate the unemployment rate.

The rate of unemployment estimated by capitalist governments therefore makes no attempt to measure the percentage of the population that is “voluntarily choosing leisure over employment” but only those who are actively seeking work, the so-called “involuntarily unemployed.” Consequently, official unemployment figures measure only a small part of the unemployed population, or to use the more honest 19th-century terminology, the surplus population. Therefore, in order to cover up the current long-term unemployment crisis we are confronted with today, there is no need to actually falsify the figures. Rather, the falsification is built right into the method and assumptions by which unemployment is calculated.

Williams goes farther than me in deconstructing the way that unemployment figures are compiled. If it makes sense to see involuntary part-time workers as part of the army of the unemployed, why not go a bit further and see the actual army in the same terms:

The considerable number of young people—many members of oppressed nationalities—who join the armed forces only because they have no chance of finding employment elsewhere—are not counted either. In the New Deal years, when official figures on employment and unemployment first began to be calculated, members of the armed forces were not considered employed. This was an echo of the theories of the classical economists who considered solders to be “unproductive workers,” since they did not produce surplus value for the capitalists.

Quite right, I’d say.

This is what we need more of. With the debate over “job growth” being seen as the bailiwick of Jack Welch on one side and Paul Krugman on the other, it makes sense to pay closer attention to what people like Sam Williams are saying. In a very real sense, it is the same kind of battle that Jill Stein is fighting, the right to be heard against two perspectives equally committed to the rule of the one percent over the ninety-nine percent.

September 8, 2012

Detropia

Filed under: Film,financial crisis,trade unions,workers — louisproyect @ 7:35 pm

If you are under the impression that there’s nothing more to be said about the demise of the auto industry and its terrible impact on working people after Michael Moore, you owe it to yourself to see “Detropia”, a documentary that opened yesterday at the IFC Center in New York (screening information for other cities is here). Dispensing with Moore’s by now narcissistic intrusion into the narrative, “Detropia” allows Detroit’s African-Americans to tell their own stories. Thankfully, it is also free of Moore’s mawkish Capraesque pieties about “turning things around” by getting Obama elected. Among the lessons we learn from “Detropia” is that General Motors has used taxpayer money courtesy of Obama’s “rescue” of the auto industry to set up shop in China to build the Volt, their new electric car.

Oddly enough, the Ford Foundation funded the film, something I would liken to the German high command furnishing the sealed train that returned Lenin to Russia in 1917. Apparently the liberal program administrators there hoped that the film would raise awareness about Detroit’s phoenix-like return to prosperity, embodied in the closing moments of the film by a couple of white out-of-towners who came there in search of a cheap loft. If so, their money was wasted since the ineluctable message of the film is that capitalism has destroyed the city that once symbolized its rise under the rubric of Fordism, the very engine of growth that made the Ford Foundation possible.

Serving as a Greek chorus on the city’s decline is a cross-section of the Black community, including Tommy Stevens, the owner of a blues bar who is a retired schoolteacher, a young blogger named Crystal Starr, and local auto union president George McGregor.

We meet Starr walking through the ruins of an old building taking pictures with her cell phone. She muses as she walks, “Who lived here?” “Where did they go?” “What the fuck happened”? Those, of course, are the same exact questions that any sensible person would ask who remembers Detroit from the 1950s as the steam engine that was propelling America into a glorious future.

The press notes provide some quantitative answers:

  • In 1930, Detroit was the fastest growing city in the world. (The Guardian)
  • Detroit’s population shrank by more than 25% in the last decade. The city’s population has fallen from over 1.85 million in 1950 to 713,777 in 2010; a drop of almost 240,000 residents in ten years. That’s 100,000 more than Katrina-ravaged New Orleans lost. (The New York Times)
  • Detroit has about 40,000 abandoned homes and 100,000 vacant residential lots. (The New York Times)
  • The average price for a home in Detroit $7,100, down from $73,000 three years earlier. (The Wall Street Journal)

As a UAW official, George McGregor has his own set of answers, revolving mostly around the greed of some of the major automobile companies and their suppliers, including American Axle Company that used to be one of the city’s main employers. Axel has left Detroit except for one plant whose workers have been presented with an ultimatum. Workers have to sign a contract based on wage cuts of up to 25% or else. When we see them at a meeting voicing opposition to the contract and a willingness to fight, we probably anticipate what happens next: American Axle shuts down the plant and moves production to Mexico.

One of the points made unintentionally by the film is that working-class weakness is tied directly to the disappearance of jobs. Classical Marxism has always been premised on the idea that struggles at the point of production will escalate until the workers realize that their only option is to seize the means of production and produce for their own benefit rather than that of the bosses.

In the 1930s, when Detroit was the fastest growing city in the U.S., a militant trade union movement found itself on a collision course with the Henry Fords of the world. Ford, General Motors, and Chrysler had no other option except to produce cars within our nation’s borders and workers could use their collective strength to force retreats. Ultimately, a reformist leadership of the UAW struck a Grand Bargain with the bosses that made business unionism acceptable and a good life for the workers the norm.

The emergence of powerful competitors in Japan, Korea and Europe made that Grand Bargain not worth the paper it was written on. Unfortunately for the working class, the UAW still acts as if it is still in place. But even if it didn’t, there is some question about its capacity to push back the bosses on their heels. In the late 70s, when the American Trotskyist movement embarked on its ill-fated “turn to industry”, it assumed that we would be reenacting the 1930s with the working class at “center stage”. As it turned out—in the words of Peter Camejo in 1983—the opposite was true:

If any class has stood in the center of U.S. politics in the last ten years, it has been the bourgeoisie. Following its sharp divisions during the Vietnam war and the Watergate scandal, it has been able to reunify itself (a unity which may be once again coming into question), and go on the offensive. The industrial working class — along with the oppressed nationalities, white-collar workers, women and students — responded to the attacks in disarray and disunity. No leadership arose in these defensive struggles to promote an effective united response, nor has there yet been any nationwide class struggle political alternative to challenge the complete dominance of the bourgeoisie in electoral politics.

As the economic crisis has grown, generating an increasing number of unemployed and worsening conditions both on the job and in life in general, there has been a reaction reaching into the industrial unions. The capitalists, forced by their drive to maintain their profits under increasingly difficult economic conditions, have begun testing and challenging the power of the industrial unions. The results at this stage are a stand-off. While the ruling class has made some important gains and has forced a series of concessions, they have not been able in open struggle to destroy any major industrial union. All their victories, at least in terms of the relationship of forces, can be rapidly put in question by the first generalized upsurge of the industrial workers.

The only modification I would make to Peter’s words, with the benefit of nearly 30 years of hindsight is to change “The results at this stage are a stand-off” to “The results at this stage are a blitzkrieg victory of the ruling class.”

It would be too much to expect co-directors Heidi Ewing and Rachel Grady, who worked together on the excellent “Jesus Camp”, to tackle the problems facing the working class, who in the final analysis is the only force capable of changing Detroit, America and the planet, and put forth any kind of strategy for social change. If they did, you can bet that the Ford Foundation would have opened the trap door beneath them.

Despite the lack of an answer to Detroit’s problems, the filmmakers have performed a major service to the left and to the socially aware film audience (my readers, in other words) by putting the challenge on the front burner. This is a film that is must-viewing for anybody who is unhappy with the mounting class divisions in the U.S. today.

As blues bar owner Tommy Stevens put it, America is facing a situation in which the ruling class has more wealth than at any time in our history while the middle class (in other words, the Fordist working class of the 50s and 60s) is rapidly disappearing. Those left at the bottom will only have a single recourse, and that is to overthrow the capitalist system. Those are his words, not mine.

August 20, 2012

Brother Can You Spare a Dollar?

Filed under: Film,financial crisis,Occupy Wall Street — louisproyect @ 4:16 pm

“Brother Can You Spare a Dollar?” opened two nights ago at the Quad Cinema in NYC and can best be described as a close relative of Michael Moore’s “Capitalism, a Love Story”. As was the case with Moore’s documentary, the dominant message is that the government should address the Great Recession of today just as it did during the Great Depression of the 1930s. Moore’s film ended on the rather foolish note that Obama would become the FDR of today, while director Thom Hoffman ends “Brother Can You Spare a Dollar?” with a nod toward the Occupy Movement. That’s progress on the political front to say the least.

Although I can recommend the film, there are some caveats. To begin with, it is politically unsophisticated. Except for Columbia University’s Alan Brinkley, an excellent FDR scholar who has examined the New Deal critically, Hoffman’s interviewees are exclusively ordinary people who either lived through the depression as very young people or who are confronting the current crisis as Occupy activists or as vulnerable college graduates entering a brutal job market. One group is identified as “professional women” from Long Island who will remind you of the cast of a Bravo cable TV reality show.

Ultimately its provenance is what makes the film interesting, at least to me (who else matters?). Without pretending that he is some kind of expert on economics or political science, director Thom Hoffman, who narrates the film and appears on-screen frequently, comes across as a next-door neighbor in Long Island, where most of the documentary was shot. While his focus was on his interviewees and their stories about trying to survive in Hard Times, my interest was primarily sustained by the phenomenon of what appeared to be an average middle-class American committing a sizable amount of time and money to examining capitalist crisis.

Thom Hoffman’s close associate Ray Adell was one of the people interviewed in the film who lived through the depression, as well as its associate producer. He has been involved in radio and film production for over 50 years, including a radio program called “About Long Island” developed for Northrup/Grumman, a major manufacturer of military aircraft. Another credit was making instructional films for the U.S. Navy, produced by Sperry Gyroscope. All this is unlikely preparation for a documentary on the evils of a system based on private property. Since Thom Hoffman was Production Manager for Ray Adell, you have to assume that he was working on the same kinds of projects. Their willingness today to critically examine the system that has left millions without jobs and without homes is something to behold even if they stop short of coming to the kinds of radical conclusions of my readers.

Now that I am retired I have more time to meet with people during the week. A couple of weeks ago I had lunch with a young man studying economics from a Marxist perspective and willing to put up with the ardors of graduate school and landing a position in a field notoriously hostile to radicals.

We chatted a bit about his parents who live and work in New York. He described his mother’s conversion to Judaism decades ago as a reaction to racist violence in Louisiana, her native state. While I am not quite sure what her exact motivations were, she was at least someone struggling to live a moral life in an immoral society in a way that she saw fit.

While adhering to liberal beliefs her entire adult life, she took an abrupt shift to the left in 2008 when the financial system collapsed. Just as Thom Hoffman decided to make a film about the crisis, she decided to look for a political alternative to the two-party system that was responsible for so much suffering. Ultimately she joined the Green Party in New York but drifted away because it seemed ineffective and because one meeting appeared dominated by Trotskyist windbags as her son put it.

I considered writing a longish post on this but have decided for the time being to only make a brief observation as follows:

There are literally millions of people like Thom Hoffman and my friend’s mother out there who are desperately looking for a political vehicle. And most certainly the Occupy Movement inspired them, including the young aspiring economist who did statistical studies on foreclosures for Occupy Wall Street.

I have no idea what happened to the Occupy Movement but want to offer a proposal for what could have sustained it, even if it amounts to nothing more than an intellectual exercise. After the cops had evicted the last activist from the last occupied public space, it would have been a perfect time to convene a national conference somewhere in the Midwest that featured plenary sessions with some of the best-known figures on the left from Ralph Nader to Chris Hedges, from Barbara Ehrenreich to Boots Riley. Some of the money that had found its way into the movement’s coffers should have paid for ads in the N.Y. Times, the Nation Magazine and Rolling Stone. The conference should have had workshops on foreclosures, debt, unemployment, etc.

The main goal of the conference would have been to form a party calling itself the Occupy Party that ran a candidate in the 2012 election—Boots Riley would have been perfect. Activists would have worked to get ballot status in all fifty states. Money raised at the conference in a closing plenary session would have funded a national office that could have maintained a database of members and kept them informed of what the movement was doing nationally through both electronic and print communications. Membership would cost $20 annually and be free for the unemployed and the poor.

Given the tremendous support that the Occupy movement received from the American people and given its willingness to confront the one percent whichever party it was identified with, this would have been the next logical step for the American left presenting in an embryonic form what the Syriza Party in Greece represents.

For most people outside of the ideologically committed Marxist or anarchist, politics means electoral politics. The key to an organization like Syriza, or for that matter Eugene V. Debs’s Socialist Party, is its ability to fight on Election Day as well as every other day of the year. Just look at the relationship between the Christian right or the Tea Party and the Republicans to see how the class enemy does it. In contrast to the Republicans, the Democrats are much more committed to strangling any grass roots movement supposedly on its side.

I am not close enough to the Occupy Movement to figure out whether this was feasible or not. I have my doubts that it was since it there was an unfortunate fetish over public spaces, even though a good part of the movement has now begun to organize around foreclosures, an issue that will remain outstanding given the White House’s treachery:

After inheriting the worst economic downturn since the Great Depression, President Obama poured vast amounts of money into efforts to stabilize the financial system, rescue the auto industry and revive the economy.

But he tried to finesse the cleanup of the housing crash, rejecting unpopular proposals for a broad bailout of homeowners facing foreclosure in favor of a limited aid program — and a bet that a recovering economy would take care of the rest.

During his first two years in office, Mr. Obama and his advisers repeatedly affirmed this carefully calibrated strategy, leaving unspent hundreds of billions of dollars that Congress had allocated to buy mortgage loans, even as millions of people lost their homes and the economic recovery stalled somewhere between crisis and prosperity.

The nation’s painfully slow pace of growth is now the primary threat to Mr. Obama’s bid for a second term, and some economists and political allies say the cautious response to the housing crisis was the administration’s most significant mistake. The bailouts of banks and automakers are now widely regarded as crucial steps in arresting the recession, while the depressed housing market remains a millstone.

Read full NY Times article

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